ECC REPORT 8
APPLICATION OF THE NEW EU REGULATORY
FRAMEWORK TO IP TELEPHONY
Paris, March 2002
ECC REPORT 8
EXECUTIVE SUMMARY
Assessment of Internet Telephony under Existing Directives
The Communication from the Commission (December 2000) relating to the status of voice on the internet under Community law still forms a good basis for assessing the regulatory position of “voice communication over the internet” in the context of the existing directives (see section 2.1 – 2.2). The new regulatory directives that will come into force in 2003 introduce a new framework for electronic communication services and networks and future assessment should be based on the new definitions set out in these directives.
Service obligations under the new directives
Obligations on Providers of PATS
The new Universal service directive retains specific obligations on Publicly Available Telephone Services (PATS) and these obligations will apply to PATS providers delivering voice communications services over IP technology networks.
Undertakings which provide a service that fall under the definition of “PATS delivered over electronic communication networks, such as, for instance, IP based technology or the Internet,” given in the Universal Service Directive would be required to fulfil the regulatory obligations set out in the Universal service Directive Chapter IV (see section 3.9).
Obligations on other providers deploying voice communication services
Providers of voice communications services (delivered over IP technology networks or Internet) that employ other name identifiers, such as Internet names, rather than telephone numbers, but who are in other respects similar to providers of PATS would therefore not fulfil the requirements of the PATS definition set out in the directive and thus would not be subject to PATS regulations. They would however be subject to some minimal obligations specified in the directives (see section 3.10).
Technology and service definitions
The definitions for electronic communication services as well as PATS as defined in the new framework directives are expressed in relatively technology neutral language and keep therefore commonly used technology dependent terms such as – VOIP, IP telephony, Internet telephony, voice over Internet, etc. do not have any specific regulatory relevance in the context of the new RRFD. Hence these commonly used technology dependent definitions are not particularly useful or relevant in assessing whether or not Providers of electronic communication services and PATS fall under the new regulatory framework (see section 2.4).
Interconnection and access
Any undertaking providing publicly available electronic communication services over electronic communication networks delivered over any technology, such as for instance IP or the Internet, will be subject to the conditions set out in the new Access and Interconnection Directive which requires such undertakings to negotiate interconnection and access (see section 3.11). Therefore the new directives extend the scope of the requirements for interconnection and access to all electronic communications networks, including the IP-based networks.
ECC REPORT 8
INDEX TABLE
1INTRODUCTION......
2EXISTING FRAMEWORK......
2.1Background to discussion......
2.2Current EC position towards the Internet telephony......
2.3Terminology meaning......
2.4New approach to definitions......
3NEW EU REGULATORY FRAMEWORK DIRECTIVES (RFD)......
3.1A new regulatory framework......
3.2The Universal Service Directive......
3.3Definition of services......
3.4Universal Service Directive (USD) and providers of IP telephony......
3.5The case of voice services not using phone numbers......
3.6Speech quality......
3.7Obligations under the Universal Service Directive (USD)......
3.8Undertaking that are subject to USD obligations......
3.9Providers of PATS......
3.10Providers of voice communication services that fall outside the definition of PATS......
3.11 Interconnection and Access obligations stemming from the Access and Interconnection Directive (AID) ......
3.12The Data protection Directive......
4CONCLUSIONS
Appendix 1 : Definitions used in the new EU Regulatory Framework Directives:......
Appendix 2 : Definitions in the Existing Directives:......
ECC REPORT 8
Page 1
APPLICATION OF REGULATORY REVIEW FRAMEWORK TO IP TELEPHONY
1INTRODUCTION
This report is a follow up to the ECTRA report on IP telephony (July 2001) that provided an overview on a wide range of the related issues.
The purpose of this report is:
- To summarise how service providers can be assessed in the current regulatory framework (based on the definitions of the Services Directive[1] and the amended Voice Telephony Directive).
- To assist NRAs in CEPT countries to assess the future position of IP telephony in the context of the new regulatory review framework directives.
In particular the report addresses how the specific aspects of the Universal Service Directive arising from the 1999 communications review[2] may apply to those undertakings, which are currently being described as IP telephony providers, VOIP providers, Internet voice providers, etc.
It touches on relevant implications stemming from the Access and Interconnection Directive (AID), as well as the Data protection Directive.[3]
It also reviews some of the commonly used technology specific terms in the context of the new RRFD in which the approach is towards technology neutrality.
2EXISTING FRAMEWORK
2.1Background to discussion
The July 2001 ECTRA report on IP telephony gives a brief summary of the European Commission position regarding how Internet Telephony should be considered for regulatory purposes in the context of the conditions established in the existing Service directive. The Commission's approach focuses on the provision of services as opposed to applications run by users. A key question has been whether a voice communications service provided over the Internet should be subject to the same regulations that apply to public telephony, provided hitherto over circuit switched networks.
The main issue dealt with by the Commission has been whether the Internet voice communications service is a substitute for traditional public telephony. It should be noted that whilst the Commission properly focuses on services, there will be many voice communications applications that run over the Internet from user to user without any specific service provision or by service providers or facilitators on the "user side" of a network termination point, and that these applications are outside the scope of the present discussion.
The Commission’s December 2000 Notice[4] has addressed this particular issue of substitution and has identified relevant criteria that can be applied when making assessments of substitution.
2.2Current EC position towards the Internet telephony
Before discussing how Internet telephony may be considered in the context of the new regulatory framework it would first be helpful to briefly identify the position taken by the European Commission on how Internet telephony should be considered in the context of the current regulatory framework, in particular the Service Directive.
The key points stated in the Commission December 2000 communication on status of voice on the Internet are:
- Confirming that the definition of voice telephony in the existing Service Directive still provides a good basis for assessing the regulatory position of “Voice communication services over the Internet”;
- Reiterating the four key conditions that underpin the definition of voice telephony pursuant to the Service Directive, namely that (1) voice telephony is a commercial offering, (2) it is offered to the public, (3) it is provided to and from public switched network termination points and (4) it involves real time speech of a quality and reliability level similar to PSTN:
- Making a distinction between VoIP (Voice over the Internet Protocol) and Voice over the Internet (equals Internet telephony) such that “VoIP” is considered to cover all kinds of conveyance of voice in which IP is used as the routing and transmission technology and ‘voice over the Internet’ is considered as a subset of VoIP in which voice "services" only are provided over public Internet;
- Taking a view that quality of “Voice over Internet” service is currently unlikely to meet the requirement of transport and switching of speech in real time because of congestion and the difficulty of managing the public Internet, but recognising potential for technology improvements and recognising real time condition would be satisfied if service provider guarantees PSTN like quality;
- Stating that when voice communication is only a (ancillary?) part of an integrated (bundled) Internet services it is not considered as a commercial offering in the context of the Service Directive and therefore would not fulfil one of the key conditions of the directive. If however the voice element is marketed separately or billed separately this is then considered to be a commercial offering;
- Concluding that “Voice over the Internet” still continues to fall outside the definition of voice telephony given in the current Service Directive, except where it meets each of the conditions set out in the definition (see above). Where it does not meet all conditions it would be considered as data and therefore not require a voice provision authorisation;
- Qualifying the above by further reiterating that where it meets the four conditions and hence appearing as a substitute for traditional voice telephony services it would be subject to existing regulatory rules and would accord with the principle of technological neutrality.
Hence the above criterion as per the Commission Communication December 2000 can still be used as a guideline to assessing how Internet telephony should be considered for regulatory purposes in the context of the existing regulations (Service Directive).
2.3Terminology meaning
ECC PT 2 (TRIS) did not attempt to precisely define the commonly used terms (e.g. IP telephony etc) in the above referenced ECTRA report and instead illustrated the different scenarios through a diagram, reinserted as Figure 1. In this case both VOIP and IP telephony terms are shown diagrammatically as covering voice services delivered over IP networks, which can comprise public Internet or managed IP networks. These services may be public telephony services or may be offered to closed user groups.
Figure 1 : Illustration to service definition
Note 1: Replace BBB? Telephony with "voice communications", note this is a change to the diagram that appeared in
the original TRIS report.
Note 2: Note that AAA is the area under discussion in this document.
It is important to note that IP technology networks in the context of Figure 1 are considered to include both managed IP networks and public Internet, but it should be recognised that the distinction between them is blurred. In this regard a managed IP network can typically be an IP technology network that a traditional telecommunication operator has introduced as part (or all) of its public network. In this case the operator would have the means to control and manage quality and interconnect conditions of its IP network. The public Internet on the other hand is also an IP network and might be considered to have PSTN voice quality capabilities in those cases where service providers have the means to be able to implement some degree of management (congestion) control.
The expressions “Internet telephony” or “Voice over the Internet” referenced in the Commission notice have not been shown on the diagram of in Figure 1. However the term “voice over Internet service” used by the Commission can be regarded as a specific instance of voice "services" provided over public Internet and would appear alongside VOIP and IP telephony. If the four conditions of the service directive are met then “voice over Internet service” would occupy the AAA slot of Figure 1 and in this instance would be considered as a public voice telephony service.
The diagram in Figure 1 shows two modes of service identification – one using E.164 phone numbers and the other using Internet names (e.g. user@domain). The former is well established and operates world-wide with billions of phone numbers in use. The latter is likely to emerge in the next couple of years as new IP terminals (e.g. SIP terminals) begin to enter the market.
2.4New approach to definitions
Definitions are used to be formulated for a specific purpose in a given context. Hence the expressions – IP telephony, VOIP, Voice over Internet, Internet telephony are all technology specific terms and have been introduced over a number of years by the Internet and IP technology players.
In contrast, the definitions included in the new regulatory framework directives (see appendix 1) are less technology specific, that is they apply to electronic communication services rather than to voice telephony per se (as per existing directives see Appendix 2) and these services are delivered over electronic communication networks (using different technologies). Hence the focus of the new directives is on services and not on how they are provided.
The definitions use language that is relatively independent of the underlying network technology and hence the above terms – VOIP, IP telephony, Internet telephony, voice over Internet etc are not particularly useful or relevant in determining how future providers of electronic communication services (in the context of the new regulatory framework) and in particular publicly available telephone services should be assessed (see section 3 below).
Although there may be merit in clearly describing these technology specific terms to aid some of the ongoing work in technical standardisation bodies (e.g. ITU and ETSI), from a regulatory perspective it is the service as seen by the customer that matters and in particular it is the category of “publicly available telephone services” that is subject to a number of regulatory provisions in the new RFD.
3NEW EU REGULATORY FRAMEWORK DIRECTIVES (RFD)
3.1A new regulatory framework
The new RFD have been designed as an intermediate phase between the current framework and an anticipated future situation where the telecommunications market will be sufficiently mature to allow it to be governed solely by general competition law.
The new RFD comprise the Framework Directive itself, the Authorisation Directive, the Universal service Directive, the AID and the Data protection Directive. In the context of this report which deals with the application of the RFD to IP telephony it is the Universal service Directive that is of particular relevance since it deals with obligations on providers of publicly available telephone services (PATS).
Although there are issues of relevance in the AID and the Data protection Directive and which are summarised later, it is really the Universal service Directive that has most relevance in the context of understanding which obligations may be applicable to providers of PATS delivered over public telephone networks and public electronic communication networks.
3.2The Universal Service Directive
The Universal Service Directive deals with rights of end-users and the corresponding obligations on undertakings providing publicly available electronic communications networks and services. It obliges Member States to ensure that all reasonable requests for connection at a fixed location to the public telephone network and for access to publicly available telephone services at a fixed location are met by at least one undertaking. In addition it deals with regulatory controls on undertakings with significant market power in specific markets.
The Directive stipulates that the connection provided shall be capable of allowing end-users to make and receive local, national and international telephone calls, facsimile communications and data communications, at data rates that are sufficient to permit functional Internet access, taking into account prevailing technologies used by the majority of subscribers and technological feasibility.
3.3Definition of services
The Universal service Directive sets out the principles for provision of a PATS the definition of which is repeated in Appendix 1 of this report. Further key definitions from the RFD are also included in Appendix 1. It should be noted that the definition, are technology neutral in that they do not link the PATS to the type of network technology that is used to support service delivery.
3.4Universal Service Directive (USD) and providers of IP telephony
The previously mentioned ECTRA report on IP telephony identifies four categories of market players as potential providers of voice telephony delivered over the Internet or managed IP platform (see section 3 of the report). All these potential providers can deliver the voice service over some form of IP network using phone numbers as the principle means of identifying parties and of originating and receiving calls. The secondary issue of using only Internet names as the principle method of identifying parties in a service is discussed later.
Thus if an undertaking offers publicly available voice services that enable the public to make and receive national/international calls (including emergency access) by means of telephone numbers assigned from a national/international number plan, then they would be considered to be providing a service that falls under the definition of PATS given in the Universal Service Directive (USD). Member States would then be required to ensure that such providers fulfil the obligations of the Directive. This applies irrespective of the technology used (e.g. IP).
Figure 2 below illustrates the case of PATS. The boxes marked “Services and Identification” are the key elements of the definition of a PATS in the new USD. The service and identification elements are independent of technology that is deployed within the electronic communication network.
*See new definition by USD in Appendix 1
Figure 2 : Publicly Available Telephone Services
ECC REPORT 8
Page 1
3.5The case of voice services not using phone numbers
This issue was addressed in the previously referenced ECTRA report on IP telephony occurring when users may be able to make and receive national/international calls using Internet names (e.g. user@host) as the principle means of call identification and delivery.
In this case the numbers from a national/international telephone plan are not used as part of the service and therefore this particular type of service would not be deemed to be a PATS in the context of the USD. Figure 3 below illustrates this case.